As Bombardier Aerospace struggles to get the new CSeries aircraft program off the ground, the company said it is eliminating 1,100 jobs in Canada and 600 in the United States to cut costs.

The company issued an internal memo Tuesday to warn employees of the looming job cuts, with the vast majority expected to be in the Montreal area including Mirabel, Bombardier’s manufacturing facility where the regional jet and CSeries programs are based.

Toronto’s Downsview plant, where the Q400 turboprops and the Global Express jets are built, will only be minimally affected.

“The mood today is difficult. It’s never easy to have to do this,” said Haley Dunne, a senior spokeswoman for Bombardier Aerospace in Montreal. “The impacted employees will be informed over the next few weeks,” though 300 of the jobs were already cut in December.

Affected positions run across the organization including manufacturing, assembly, engineering, sales, after-sales support, and support functions. They include both contract positions and permanent staff in both unionized and non-unionized jobs.

Dunne said Bombardier currently has about 300 unfilled positions, which are considered core jobs, so affected employees will be considered for them.

The job cuts come as Bombardier tries to preserve cash as it invests in costly development projects such as the CSeries program, budgeted for $3.4 billion (U.S.), as well as revamped Learjet and Global Express jets.

“Since the end of 2012, we have been going through many exercises within the company to reduce our costs, from limited business travel to no off-site meetings,” Dunne said.

“At this point, we have had to make the difficult decision to include workforce reductions.”

On Monday, Bombardier reported that it received 19 per cent fewer aircraft orders in 2013, compared with a year earlier, which was blamed on a sluggish economy.

Bombardier has also struggled to fill its order book for its all-new CSeries aircraft, which has faced repeated delays. The latest came last week when officials announced the plane would not enter service until the second half of 2015, a longer delay than anticipated.

Once the CSeries ramps up production, some unionized positions could be recalled and other new jobs created.

The U.S. job cuts are centred in Wichita, Kansas, where Bombardier assembles the Learjet.

RBC Capital Markets analyst Walter Spracklin said in a note that the layoffs are “clearly set to help address cash concerns and help Bombardier meet both operational and new program funding” as it remains in a period of high capital expenditure spending.

“While delays are common for any major aerospace program, the magnitude is heightened for Bombardier due to the company’s leverage and the size of Bombardier’s investment in the CSeries program,” Spracklin wrote.

“We believe the latest round of job cuts is symptomatic of the balance sheet pressure.”

Unifor national president Jerry Dias, who worked at the Downsview plant in the de Havilland days, said the announcement reflects the weak economy.

“The aerospace sector has historically had its ups and downs,” said Dias. “When fuel prices are high, turboprops sell. When oil prices are low, jets sell well,” he said.

He expressed confidence in Bombardier, calling it a “crown jewel” of Canadian manufacturing. “They will go through bumps and bruises like everybody else,” Dias said.

However, he believes the falling loonie brings more optimism for Canadian manufacturing. “Manufacturing is much better off today than it was even six months ago,” Dias said.

Bombardier Aerospace has 38,350 employees worldwide including 22,200 in Canada and 5,700 in the United States.

Recent job cuts in Canada

Sears Canada has made several rounds of job cuts in the past few months including nearly 800 jobs in its Toronto head office and in parts and repair services in November. Then last week, it announced the elimination of another 1,600 jobs including 1,345 call centre jobs and 283 distribution centre jobs.

Heinz Canada is closing its century-old plant in Leamington, Ont., which produces everything from ketchup to baby food, by mid-year, throwing 740 people out of work.

Smart-phone maker BlackBerry said last October that it would take a $400 million charge for restructuring that included 4,500 job cuts – which comes on top of thousands of jobs eliminated previously.

In December 2013, Kellogg announced plans to close its London, Ont., plant at the end of 2014, cutting more than 500 full-time jobs on top of 110 layoffs announced a month earlier.

Potash Corp. of Saskatchewan slashed nearly 20 per cent of its workforce in December when it eliminated more than 1,000 positions.

Also, in December, U.S. Steel put an end to a century of iron and steelmaking in Hamilton when it announced operations would wind up for good, after the mills were first idled in 2010. The move resulted in the loss of 47 non-union jobs, though U.S. Steel said some staff would be moved to other positions.

Source: Star library

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